How to Grow Your Business – 5 Ways to Evaluate Your Customers
For many businesses, 2020 has been a challenge. We entered 2020 with the anticipation of another good year and then we had lockdowns in the Lehigh Valley and throughout the US due to corona virus. Whether your business prospered or struggled in 2020, as you look towards 2021, you need to take time to understand your customers. Without customers you have no business. When is the last time you thought about who buys your products and services? Here are 5 key things to consider as you develop your plans for 2021.
How Have Your Customers Been Impacted by 2020
Have you taken time to evaluate how your customers have been impacted? Start with your largest customers (they could be the ones that generate 80% of your revenue or they could be your top 15 customers). Has their buying behavior changed? Are they more engaged or less engaged than before? Are there services that you offer that are helpful to them in re-building in 2021? Are they the same customers you had in prior years? If not, you need to understand why. What has changed? Do your former customers no longer believe that your products are providing value to them in their recovery efforts?
Think about your answers to these questions. What needs to change? Is your delivery system capable of meeting your customer needs? Do your products meet their needs? Do you need to develop a communication strategy that reminds them the purpose of your company and that your team is with them every step of the way to service their needs? Regular dialogue and feedback will help in retaining these key customers.
Who Are Your Most Profitable Customers?
Which customers account for 80% of your profit? If you are not exactly sure, you need to take time to figure it out. These customers are typically your most loyal customers. Can you list the 5 things that are most important to their businesses? Can you list the 5 reasons why they have stayed with you all these years? Are these reasons well aligned? If not, how can you fill the gap? If there is such a thing called “above and beyond”, they are the group of customers to offer it to, and this is the time you make that offer.
Who Are Your Customers You Can No Longer Afford?
We all have them! They are the ones who file the most complaints, consume the greatest number of internal resources and probably your time. They have no loyalty as they switch back and forth between you and your competitors. They also are the ones to refuse price increases, fuss over every single discount available, and take the longest to pay their invoices. Can you change their behavior to lower the cost of service to them? If not, it may be time to cut them loose.
What About Your Other Existing Customers?
Do your other customers come from various industries as well as geographic locations? Are they different sizes and types of companies? Think about them and identify key basic elements that really separate them from each other. It may be purchasing decisions, behaviors, needs, the way they use your products or services. You cannot be all things to all people. However, if you find underlying characteristics that differentiate them by groups of customers, you can then develop strategies of service to address those groups of customers. Looking at what motivates them and meeting those needs can impact both their satisfaction and loyalty. Remember it is always easier and much cheaper to take care of your existing customers than to go find new ones.
What About the Customers Who Recently Left You?
Do you understand why they stopped buying from you? Reach out to try and understand if anything has changed in their requirements or was it something that you did. Be open, gather feedback and make changes if feasible. Can you alter your services, offer new products, or alter your existing products to meet their needs? When you have made changes, communicate with them. Recognize that you will need to convince them your value is better aligned with their needs.